I recently gave a talk on “Managing Fear” at the Bosch “Future of Mobility Day”. This talks about the need to translate fear into something positive that can be used as a powerful tool for progress and change. Without fear, there would be no progress…
This is now available online.
For the recording of the presentation, please go to https://youtu.be/5X95IPaKNqo.
A copy of the slides (they are not always clear on the film) can be found at https://www.slideshare.net/PeterLeeson/managing-fear.
For many years, I have been interested in Quality.
Quality is something unique and needs to be taken seriously because Quality is the only thing most businesses have to offer their clients: I can find your products and services somewhere else, only your quality differentiates your offer from your competition.
Quality is strange because few people appear to know what it is or make an effort to define it. They may complain about lack of quality, but don’t actually take the time to explain it in measurable terms. Frequently, it is the absence of Quality that allows us to frame its definition.
Business people are generally familiar with the basic concepts of collecting and collating, qualifying and quantifying clients’ values, needs, expectations, requirements and desires; they know how to prioritise, plan and perform your work accordingly. However, when one asks them about the amount of quality they will put into it, they can’t answer.
Engineers may answer by explaining how many – or few – defects per thousand line of code they leave in their software, or they may mention the mean time between failures of their equipment. That is not quality, that is minimising averageness.
Salespeople and designers respond with the coverage of requirements and compliance to standards, but that is not quality. It is delivering a product or service that matches what you promised to your customer and does not break down. That’s not Quality, that is the contractual obligation. The fact that you are compliant to ISO9001 or some other industry standard, or that you have implemented PRINCE2 is really of no interest to me as it does not guarantee anything. These are valid standards, but they refer to the apparent quality of your processes, but not of your products and services.
Quality as a Relationship
Quality is hard to define because it is not a functional characteristic you can produce. Quality is not something intrinsic to your products or services: it is the relationship between an individual and a product or service. The quality of your products is the relationship your clients (and prospects) have with them – and relationships are more complicated to engineer, plan, estimate or measure. Relationships may even change from day to day, sometimes better, sometimes worse, dependent on external factors.
Quality is whatever your client says it is today.
So, the question is: how does one plan, design, estimate and cost a theoretical relationship that a potential future client might have with a product that does not yet exist?
Let’s go back a few years; in fact, let’s go back many years, all the way to the year nought and a Roman architect called Vitruvius. The man’s a bit of a mystery; we’re not sure what his full name was: he may have been called “Marcus Vitruvius Pollio”, or possibly “Lucius Vitruvius Cordo”, maybe he was called Mamurra. He is known to have built a basilica in Fano, but no trace remains of it.
What does remain is his 10-volume treatise called “De Architectura”.
In his oeuvre, he sets out a few fundamental principles defining quality, principles that are still as relevant today as they were two thousand years ago. Vitruvius’s theories resurfaced in the fifteenth century and acknowledged as a source of inspiration for architects and designers such as Batista, Da Vinci and Michaelangelo. In the 1970s, his ideas inspired Christopher Alexander to write a seminal work on architecture defining what he called “A Pattern Language”. This book, in turn, was a source for the 1994 book called “Design Patterns” which fundamentally changed the IT industry and software development.
A Roman architect from antiquity who revolutionised computer software development must have said something of value.
Sense of Proportions
A central concept of Vitruvius was the relationship required to relate the very big to the very small.
He explained that your building, your product, no matter how big and majestic, no matter how sublime and enormous, must have proportions related to those of the human body. The structure and proportions must remain consistent from the highest-level concepts, down to the minutest details.
Today, in the world of business, we need to ensure that our principles, values, vision and mission statements remain understandable and coherent from the lofty CEO level down to the factory floor. Everything – policies, processes, procedures, plans and practices – need to be aligned and consequent.
Quality Without a Name
However, the critical Vitruvian concept for me is his trefoil description of Quality; one which Christopher Alexander called the “quality without a name”, an absolute quality surrounded by known measurable concepts that reflect it but are not sufficient to define it.
Vitruvius describes quality as being composed of three key ingredients: firmitatis, utilitatis and venustatis.
The first quality is the stability or reliability you offer.
How well do your products or services survive in times of trouble? How good are they when storms hit?
If you build a house in which the roof leaks or the walls creak in a strong wind, you have failed. If you sell a car that won’t start when the outside temperature is below freezing or a network that overheats if used consistently for more than a week, your product has fallen at the first hurdle, and the very idea of quality is out of your grasp.
The second aspect of quality is the utility or usability of your product.
Of course, all businesses are aware of this and believe that they are delivering something useful. However, this needs to be confirmed by your clients. A Lamborghini Testarossa is of little use to a disabled person trying to go shopping in a medieval cobbled village; in that context, the car cannot be considered as quality as it is not fit for purpose. Few people would appreciate the value of a great enlightened book on the keys to success in their own business should it be written in an unknown script like Sanskrit or Georgian.
To understand the usability of your products and services, you must have a clear understanding of your clients’ needs, beyond their requirements, why they might be interested in your products, and how they plan on using them. You need to understand their business, their life, their issues.
The third aspect of quality is the desirability or beauty of your products.
If I can find the same thing elsewhere and if I can find it cheaper, what would make me want to buy from you? What will make me come back for more in a few weeks, months or years? What is the additional feature, the surprise, the “wow” factor built into your offering? What is the thing I was not expecting but brings more value than I would have imagined? What is it that I have not requested, have not considered, and to which I might not have agreed to pay if you had suggested it?
Desirability is something that was understood by Steve Jobs, but not by Bill Gates: no one ever queued up overnight to buy an upgrade to Windows.
That additional feature or aspect, that extra, that unexpected thing that your client really appreciates, even if it is only retroactively, that is your added-value, where your quality lies. That is the Quality what you need to estimate in terms of value and cost.
In business, you have a risk appetite: your risk appetite defines the amount you are willing to spend, invest or risk without security. At the most elementary level, this is how much work you will do before you get paid. You estimate the cost of labour and expenses based on your risk appetite; it defines how much time, resources, money and effort you invest in developing or delivering something no one requested yet.
The next step is to estimate the value at the same time as the cost, with the same rigour, based on your market research, your understanding of your competition, your knowledge of your clients’ needs and desires, your insight into what your clients’ competitors are planning. That is the added-value or quality of your development work.
What would it bring if you added this function, how much would it attract, tempt, hook your existing and future customers?
If the value is higher than the cost, do it, whatever the cost.
If you estimate the cost to be higher than the value, don’t.
He raised all the traditional concerns and shortcomings of the schooling system in which there is a focus on getting good grades for the school, rather than educating or teaching the students to learn. The purpose of school has largely been forgotten and it has turned into a bureaucracy aimed at demonstrating the statistical value required by the authorities who allocate grants and funding.
In the 19th century, something similar happened to businesses, as a new life-form evolved on planet earth: the corporation. While businesses in the past were created to offer a service or product to neighbours, they evolved into creatures whose sole purpose was to grow, eat and reproduce. The corporation’s main ambition is to kill off the competition in order to maximise profits. Those profits are then not spent on the community or the service, but on increasing the wealth of shareholders and owners; the original concept of service to neighbours is largely forgotten.
During the past few decades, a flotilla of new concepts have come into existence for businesses, concepts that are promoted by management consultants – sometimes to the benefit of the business, sometimes to the benefit of the business’s staff or clients, sometimes solely to the benefit of the business consultant. One of the key players in this field was a man called Dr.Deming. Dr Deming’s best-known contribution to the world is probably the “plan-do-check-act” cycle, that has been used, misused and abused millions of times – mostly by people who restricted themselves to only reading the four words and believing that they understood the underlying principles.
One of Dr Deming’s more fundamental business recommendations were his “14 points for the transformation of American industry” (“Out of the Crisis“). It is my belief that it is high time the education system start considering the same solutions. I am listing them hereunder in their shortened form with some explanation as to what this might mean in education:
- Create constancy of purpose toward improvement of product and service – it would, of course, be necessary first to identify what are the purpose, product and service of the education system. Is it really just to train people to succeed at tests and exams? Is it to provide a steady stream of potential employees in industries and jobs that may be obsolete in a few years? Or is it to create people able to think for themselves, to generate a thirst of knowledge? As long as there is no clear understanding and commitment, the very concept of “improvement” remains impossible to achieve.
- Adopt the new philosophy. We are in a new economic age, we must accept the challenge, learn our responsibilities and take leadership for change – in a world where all information is at your fingertips, in your pocket, in the world of Google, does it still make sense to teach facts and memorise dates? Isn’t it time that we start teaching our young people to understand historical causes and consequences, how to differentiate between facts and rumours, how to understand what is propaganda and what is science? In a globalised world, isn’t it high time that we eliminate the parochial aspect of national education and work at establishing a generation that understands other cultures, speaks many languages and can accept differentiation without disdain?
- Cease dependence on inspection to achieve quality – quality needs to be designed into the education system, with an understanding that different people have different interests and that it is the responsibility of the education system to create the variety required to progress society rather than trusting exams to demonstrate conformity to theoretical principles.
- End the practice of awarding business on the basis of the price tag – nothing is more valuable to a society than the education of the next generation, yet governments continue to scringe on basic needs because of short-term costs; we cannot build a solid future for the world if we allow the education system to be undermined by bureaucratic bean counters; we need to understand the value of education and prioritise this over vanity projects by politicians or devising more interesting ways to kill people and break things.
- Improve constantly and forever the system of production and service to improve quality and productivity, and thus constantly decrease costs – the education system needs to analyse the manner in which things are being done and delivered; lessons need to be learnt as to why one school or educator is more successful than another – instead of rewarding the successful school with extra grants, we should be using their experience to educate the educators.
- Institute training on the job – this may have to be inverted in the case of education: it would be good for people who have been in the education system for a long time to have a break from the classroom and actually go into a different job, related to their teaching, in order to get them to understand the relationships between their theories and the real world.
- Institute leadership – the education system in many countries is bogged down by administration and management levels: management focuses on the budget and stability, respect of rules and processes; we need leadership, focused on change and inspiring people to the “pleasure of finding things out” – leaders are people you want to follow, managers are people you have to obey.
- Drive out fear, so that everyone may work effectively – the education system is run with the constant stick and carrot of grants and ratings; fear does not promote efficiency, fear promotes compliance to whatever the authorities say, even if that is visibly counter-productive.
- Break down barriers between departments – one of the more successful education ideas I know is the idea that “secondary” courses are taught in a foreign language, by a native speaker instructor: teach geography in Swedish, teach PE (physical education, gym) in Arabic – you will help young people understand how other cultures think.
- Eliminate slogans, exhortations and targets (…) they only create adversarial relationships – no comment, this is self-evident.
- Eliminate quotas, management by objectives, management by numerical goals. Substitute leadership – exams and tests are valid tools to determine where the system is failing the students, they should not be used to determine success or failure of students or the relative value of schools and universities, they should be used to determine which students are requiring more assistance and support. Today’s league tables encourage schools to exclude students that are failing in order to raise the school’s average, instead, the measurements should be used to identify what additional support and guidance they need.
- Remove barriers that rob [people] of their right to pride in their workmanship – an educator’s job should be focused on educating rather than filling out forms that nobody will read. Dr Deming’s point continues to say this means inter alia, the abolishment of the annual or merit rating.
- Institute a vigorous programme of education and self-improvement – every teacher, instructor and educator, should be on a continuous training programme that allows them to improve their personal value; this is not the same thing as closing down the school once a year for “teacher in training” sessions during which they learn of the latest government initiatives, rather this is increasing the value of the teacher, demonstrating the thirst for knowledge that they should be inspiring.
- Put everybody in the company to work to accomplish the transformation – people working in the education system know better than anyone else why the system is failing, certainly better than government officials in offices far removed from the institutions. Let them speak up.
I recently came across an article I wrote some time ago for a client’s internal newsletter; I stand by (most of) what I said at the time…
The contents include a short article on skills and people management as well as information about upcoming public events at which I will be presenting. As always, questions, comments and more are welcome.
The Challenges of Managing a Growing Business
Managing a growing business presents unique challenges. In this article, I am referring to three case studies. These three businesses suffer from problems that originate in a very similar root cause. I could help them identify this with “organizational therapy”. The structure of the article is:
- General introduction to the context of the three businesses;
- Defining the common problem;
- The main problem and results for the three case studies;
- The principles of organizational therapy with which I could assist all three;
- A brief conclusion on the pains of managing a growing business.
Establishing the Context
I have recently been working with three growing business. In this article, I will name them by their initials, as these are handily A, B and C. They all three work in the interactive, web-based IT services, but function according to very different business models:
- A is an IT service provider. They deliver cloud storage and managed services. They support their clients to let them focus on their own business rather than managing their cloud and data needs. A team of professionals assures clients that their systems are updated and maintained.
- B is a software outsourcing business, developing and delivering web-based applications and websites on customer specifications. They have a number of teams designing, building and delivering websites and interactive online products.
- C has its own product, a niche market, but a market leader in their area, particularly in North America. Their team works with specialised, cutting-edge skills and deliver solutions that remain one step ahead of what their clients expect.
All three companies started up fairly recently (in the past ten years). All three are located in the same region in Central Europe.
All three companies are still being managed by the enthusiastic and extremely competent technical entrepreneurs who originally created the business.
All three companies are building high-quality products that have earned them an international market presence.
All three companies are self-aware enough to identify that they needed help in managing their growing business.
All three companies grew from a handful of people to a size at which structured management and skills are needed. All three suffered in different ways from their success and growth. This led them to contact me and ask me to come to help them understand and sort things out with them.
Defining the Problem
Entrepreneurs are typically technically savvy people with creative ideas. They understand how to build great products or deliver amazing services. They build their business and create something that works; with some marketing, they sell their product.
However, entrepreneurs are not natural managers. They create their business by doing everything, working all hours, designing, building, refining, updating, marketing, negotiating, selling, making the coffee… Once the business grows they find that they need to start hiring people. These new employees are expecting a job, a regular salary and “normal” working hours. A growing business means more management and more management skills.
- With more than twenty employees, entrepreneurs are no longer able to know what everyone is doing at any given moment.
- With more than fifty, they no longer know about the people in their business. They may know the faces and the names, but not much more than that.
- At a hundred employees, they don’t even know some people working for them. They see people in the office, who greet them by name, but they don’t know who are these person or what they do.
Now for bright technically competent self-starters, there comes a time when they must decide they need a professional CEO and hand over the reins. This is a difficult choice. I am suggesting they need to put their baby up for adoption -not a newborn child that they do not want or cannot afford, but one to whom they have given birth, nurtured, loved and watch grow up…
Rarely are entrepreneurs ready to manage a growing business.
The Individual Business Issues
Company A’s Vision
Company A had some teething problems, but the founder was rapidly turning from an entrepreneur into a businessman. He understood that he needed to hand over responsibility and authority in order to manage the business rather than developing the product. Of course, this was not an easy step to do, and he was still caught out publicly contradicting one of his directors. When you place someone in charge of a division of your business, you may not contradict that person in front of his or her team. Ever.
However, the main issue for company A was to clarify and deploy a vision and strategy for the company. As it had grown, different areas were starting to have a life of their own, and there was a risk for the company unity.
Over a couple of days with the management team, we drew up a business strategy and vision statement. The vision statement was the usual one-line BS feel-good statement – after all, we want something catchy that people can remember. But, more importantly, we drew up a “butterfly diagram” of the vision statement. This included a list of effects and changes that should be noticeable if the vision was implemented, and a list of risks, issues and impediments that would stop the vision from becoming reality.
From that, we could assign specific goals to all the key people to either remove, mitigate, reduce or avoid a specific risk or issue, or accelerate, facilitate or deploy one of the noticeable consequences of the vision.
This approach gave structure to the management team and help define their goals more clearly.
Company B’s Measurements
Company B had probably grown too fast, been too successful. As an outsourcing company, they had done what their clients required, giving them a wide range of expertise in a variety of technologies and tools, depending on what clients wanted. This meant that they had different teams working on different tools, using different methodologies… Rapid success allowed the founders to build the company largely on a reactive mode: they responded to client requests instead of leading and guiding them. The entrepreneurs who set up the business are still at the helm and coming to terms with the fact that they probably reached the point when they needed help to effectively manage the business. They also understood they were no longer up to date on the technologies being used.
Because of the reactive nature of the organization, they were lacking in a clear understanding of their own performance or productivity, even less of their actual quality. Most people, when I spoke to them said that they knew they were producing quality if clients did not complain. When speaking of “defect density” or “mean time between failures”, they had no clear understanding of what these meant. By introducing systematic measurements of the cost of quality, a better understanding of the key activities for continuous improvement would become possible. It will also help the marketing and sales side of this outsourcing business as they can prove the quality they deliver and justify the time and cost required to deliver high-quality and high-performance products.
Company C’s Organization
The management team of the third company understood that they needed to bring in professional management and they hired a new senior manager. However, differences of opinion at a personal level soon came to light between the entrepreneur and the new vice-president who came from a large corporate environment. One continued to intervene and change things at a micro-management level, the other tried to establish rigorous processes and controls. Many staff members reacted to this difference of opinion and frequently sided with one or the other. They considered the entrepreneur as a bully, or they considered the VP as too weak. Management must speak with a common voice (at least publicly) in a growing business.
In addition to badly defined roles and responsibilities, the lack of defined limits of authority of the senior people was the apparent key issue. A significant number of people expressed frustration at the confusion between who was responsible for what and the absence of limits to what a senior manager was allowed to do. Formalizing and standardizing this could solve this.
This involved clear definitions of roles, responsibilities and authority to ensure that people their role and position in the company. It also led to the creation of separate teams that worked, according to Agile-Scrum principles to be able to rapidly deliver upgrades to their standard product. In addition to this, the recommendation was that the roles, responsibilities and authority should be defined using a table of skills and competencies similar to that proposed by SFIA.
The approach taken in these three businesses was based on what I have been calling “organizational therapy“.
This is a process through which I proceed through a series of interviews, starting with senior management and moving through the various layers of the business up to the people doing the “real work”, those who are actually building the product and delivering the services, the “factory floor”.
In most businesses (and I have been an international consultant for over twenty years, and an employee in a number of companies for over forty years) The disconnect between management and team members is found to be the main issue regarding quality and performance. You expect this in large multinationals, with a distant executive team on the top floor and 15 layers of middle management. However, you need to recognize it in small and young companies where the director is known and accessible to all members of staff.
Small companies, start-up companies are frequently run by an entrepreneur who has too much power. It is difficult for them to understand that things have moved on and that some form of formal, structured management is now required in a growing business.
By communicating the failures caused by the absence of structure to the management team, I help them understand the urgency, but, as long as they do not see the frustrations of those people that the form the base of the business, the ones who are actually producing what your clients want, they probably do not really understand the problem, let alone acknowledge their own limitations.
Entrepreneurs are usually great at the creation of businesses, products and services; they are rarely suited to manage a growing business. An entrepreneur wants to be involved and know everything that is going on in the business; a manager needs to be able to step back. The three breaking points at which an entrepreneur can expect to lose control are when you get more than 20, 50 and 100 employees. At those points, the whole culture changes. When there is a probability of reaching one of these breaking points, it is important to be prepared. Communication, processes and metrics, reporting structures need to be designed and defined. If you let them evolve organically, they are likely to be wrong.
These problems can be resolved with an independent, confidential discussion with employees. The conclusions of which are redacted and reported.
Change is important, pragmatic improvement is critical.
I was recently requested to give a short talk at the launch of “Today Software Magazine” in Cluj (Romania). As this was very much at the last minute, I did not have the time to prepare my talk as much as I would normally do. However, I am happy to share it.
As a new year starts, it seems that (nearly?) all journalists are busy making their forecasts for the future. Of course, at the end of the year, we may be given the opportunity to look back at their predictions and see how wrong they are. They are currently predicting that President Trump will not last the year, or that he will last but not get reelected next year, or that he will get reelected, or that he will be in prison, or that he will stand down in exchange of amnesty, or just about anything else. As we listen to these predictions, we must think to ourselves that these journalists don’t really know or believe themselves what they are saying – it is mostly making predictions based on personal desires or fears…
And yet, in business, we believe that all estimates need to be contractually binding, transformed into deadlines, with penalties for “non compliance” should a delivery be a day late. I have already written about estimating problems, so I will not return to that topic.
However, I do want to remind you that an estimate, ultimately, is just guesswork. Perhaps you have a lot of data to demonstrate that, in the past, this was how long something took; perhaps you have done a statistical analysis and can show root causes of variations, but it is still, in the end, just a guess.
When requesting an estimate from someone, you should always ask for a confidence level. I tend to recommend an estimate to be provided in the form of an S-curve:
This approach allows you to say that you will only feel 100% comfortable if you are given at least x (in this picture, 703 days) to complete the project. If you want to negotiate down to 500 days, I feel 80% comfortable that we can deliver; if you are willing to take the risk, we can work together.
A consequence of this is that, as I have frequently said:
- an estimate should never be translated into a deadline;
- always make sure that you are clear why you are asking this and what you plan on doing with that estimate.
Language is tricky. If you request an estimate, a forecast or a prognosis, you may get very different data depending on how people interpret that word. If you request a projection, an evaluation, an assessment or an opinion, who knows what you might get in return.
But remember, ultimately, it’s just a guess.
In November 2018, I gave the following talk at the IT Days Conference in Cluj (Romania), organised by “Today Software Magazine”.